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Tuesday, June 23, 2020
Redundancy is where you close all or part of your business or employ fewer people to run it.
You begin any redundancy process by asking the question why – what has changed. What steps have you taken already to try and save costs (bank, landlord, suppliers). Going forward what does the “new normal” look like. Take a little time to set down some basic facts and figures in a simple business overview.
Individuals need to be employed for two years or more to acquire rights to claim unfair dismissal for redundancy. Therefore consider whether you can achieve labour savings by dismissing those with less than two years service. However, will that be sufficient or more fundamentally does that group of people include some of your best and brightest talent which you wish to keep.
In terms of documents look out contracts of employment to check what people can be required to do, whether there are any mobility clauses and what notice and payment in lieu of notice provisions exist. If there are recent appraisals again dig them out to see how people have been performing historically. Finally, look at the attendance records for the last one-two years. Who always comes to work, who is regularly absent and why.
Finally, you reach the position of undertaking the process itself. Are there going to be selection pools and/or selection criteria? Think about what you need going forward and what criteria matches that requirement. Who is going to conduct the consultation meetings and the scoring. Who is going to conduct dismissals and/or appeals.
Look very carefully at the HR function. Is it experienced enough to undertake this task. If not consider contracting someone in for the process.
Finally make sure you get experienced employment lawyers retained to deal with the unexpected and tricky questions.
It is money well spent. Get it wrong and you can end up paying 12 months pay for each individual who succeeds in a claim.
Written by Robert Gibson, Senior Consultant - Employment Law
Robert is a Senior Consultant at Samuel Phillips and specialises in employment and business matters. He advises in relation to employment and shareholder disputes, including pensions and related issues.
